If this thread is limited to New England towns, I'd nominate the following:

Hanover, NH - Sure it's a cliche college town in many ways, but in my own opinion Dartmouth has the most picturesque of all the Ivy League campuses (though I haven't seen Cornell's, which very well might take the cake).

Ogunquit, ME - Beachside resort town, with less distinctive urban architecture than most New England towns (it's TINY), but it's still lively and the housing is attractive.

Concord, MA - A bigger version of Ogunquit: less remarkable for its downtown than for its well preserved history and historic homes. Low density but still well-forested and a distinct if small center.

I'm sorry if I missed it, but did these ever get past nomination status?

For sake of discussion, I'll add my own if its okay.

CT- Mystic or Pomfret
Maine- I'll second Bar Harbor. I was afraid it would be too touristy for my enjoyment, but it really was fabulous. I liked Camden for photos, but was extremely disappointed to find the town virtually shut down at 6 pm on a Friday.
NH- Portsmouth, which squeaks in under the population threshold
VT- Middlebury.